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Swiss Supreme Court on anti-suit injunctions based on coexistence agreements

Swatch AG, proprietor of the trade mark SWATCH, and tks sa, Belgium, proprietor of the (newer) trade mark ICE-WATCH, have concluded a coexistence agreement under which Swatch consented to the use and registration of the mark ICE-WATCH by tks under certain conditions.

Swatch later alleged that tks was in breach of its contractual obligations under the coexistence agreement, resigned from the agreement, and filed oppositions against several of tks' ICE WATCH applications. Tks claims the resiliation is null and void, the coexistence agreement binding, and Swatch therefore in violation of its consent not to oppose the applications provided they conform to the specifications of the coexistence agreement, which tks insists they do.

Tks filed suit against Swatch before the Commercial Court of Berne, asking, among others (it's a complicated procedure) that Swatch be enjoined from filing oppositions against its ICE WATCH marks. Swatch argues interalia that this would amount to an anti-suit injunction in the sense of C-159/02 Turner vs. Grovit. The Commercial Court did not agree, Swatch appealed to the Supreme Court, and the Supreme Court, in a carefully argued and lenghty decision, agreed with the Commercial Court on this issue.

The Supreme Court noted that the prohibition to file suit (opposition) was based on substantive law in this case; it was based on a contractual obligation of Swatch (the lower court had found the resiliation void). It was not comparable to a purely procedural anti-suit injunction to avoid forum running. The view that anti-suit injunctions were illegal under the Brussels Convention/Lugano Convention did not bar such injunctions which were rendered to enforce contractual obligations.

This decision comes as no big surprise, but is a relief for anybody who has ever drafted a coexistence agreement and subjected it to Swiss law. Many coexistence agreements contain "anti suit" provisions in the sense that X shall not file opposition against trade mark applications of Y, provided Y conforms to certain conditions. If these provisions were practically unenforceable, that would be a severe problem in practice. Luckily, the Supreme Court decided otherwise.

Link to decision of 5 April 2012 (in German). 

Posted by: Mark Schweizer @ 10.00
Tags: Switzerland, coexistence agreements, anti-suit injunctions,
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